- Australian auction clearance rates remain near multi-year lows despite fewer properties going under the hammer.
- Sydney’s preliminary clearance rate was particularly weak, pointing to the likelihood that its final figure will be revised down to below 50%.
- CoreLogic will release weekly price data from Australia’s five mainland state capitals later today.
Australian auction clearance rates remain near multi-year lows despite fewer properties going under the hammer.
According to preliminary figures released by CoreLogic, a combined capitals clearance rate of 55.8% was reported last week, down fractionally on the 55.9% preliminary estimate released in the first full week of July.
The near-unchanged reading came despite a steep drop in the number of properties going to auction, falling to 1,172 from 1,400 a week earlier.
CoreLogic received results from 908 of auctions held. Within that total, 510 properties either sold before, during or after auction. 398 failed to sell, including 86 that were withdrawn prior to auction.
Based on historic patterns, the large number of unreported results suggests final clearance rates for the week — released on Thursday — will once again be revised down towards 50%.
In the first full week of June, a final clearance rate of 52.6% was recorded across the capitals. One year ago, clearance rates stood at 69.4%. The steep decline reflects that lending standards have been tightened over the past year, along with higher listing levels in Sydney and Melbourne and an overall deterioration in sentiment towards the outlook for prices in Australia’s largest cities.
“The weighted average has remained within the low to mid-50% range for nine consecutive weeks, and auction volumes have trended lower over each of the last four weeks,” CoreLogic said.
As in the prior week, preliminary clearance rates for houses outperformed units, standing at 56.2% and 55.3% respectively.
Earlier this year, clearance rates for apartments had been higher than houses in general, something put down to better affordability levels and demand being brought forward by the introduction of stamp duty discounts for first home buyers in New South Wales and Victoria.
By capital city, preliminary clearance rates in Sydney fell, offsetting a modest improvement in Melbourne.
“There were 403 Sydney auctions this week returning a preliminary auction clearance rate of 52.4%,” CoreLogic said.
“[This] compared to 50.1% across 552 last week, and 69.2% across 609 auctions one year ago.”
In the prior week, Sydney’s preliminary clearance rate stood at 55.1%.
Suggesting that Sydney’s final clearance rate could be revised substantially lower, CoreLogic received results from just 294 of the 403 auctions held. 59 were withdrawn prior to going to market, accounting for the vast majority across the country.
Given the number of unreported results, the final clearance rate could well fall back below 50% should historic patterns be maintained.
In contrast to the performance of the Sydney market, Melbourne’s preliminary clearance rate improved, lifting to 60%, up from 58.2% one week earlier.
560 auctions were held across the city with 453 results received by CoreLogic. 272 properties sold while 181 were uncleared.
In the prior week, Melbourne’s final clearance rate stood at 56.1%.
Across the smaller capital city markets, preliminary clearance rates improved in Perth and Canberra but weakened in Brisbane and Adelaide.
Given the trends seen across the country, the persistent weakness in Australia’s largest auction markets point to the likelihood that median prices will continue to fall in the period ahead.
Markets will get further clarity on that front later today when CoreLogic released updated weekly price data for Australia’s five mainland state capitals.
From a broader perspective, prices have been trending lower in Sydney, Melbourne and Perth over recent months, masking modest strength in Brisbane and Adelaide.
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